Monthly Archives: November 2012

Pig Iron producers in India might not hike prices for December 

NINL and RINL, the major Pig Iron producers in India might not raise prices, standing at Rs 23,500/MT (Basic) for December as they are holding inventory in large quantities due to no exports deal finalized for around a couple of months.

Demand is weak from manufacturing units that are running at losses and government has not yet taken measures regarding projects.

Other Pig Iron manufacturers across the country might not hike offers too.

There are certain possibilities of Pig Iron exports during mid of December as dollar is high and imported scrap prices have moved up.      


Indian scrap buyers prefer domestic scrap over imported material on high cost

Higher offers in global market
and weakening Rupee in currency market have made the overseas scrap dearer in
Indian market. Indian mills prefer to use domestic material over the imported
one as it is being transacted with cheaper rates.

Currently, domestic scrap is lower
by Rs 1,000-1,500/MT against the overseas material which is being imported by
Indian consumers. Few suppliers are selling at loss as there are no buyers in
the market at the expected levels from them (suppliers). They are offering HMS
grade at $ 400-405/MT CFR but buyers are expecting at $ 385-390/MT CFR.

In domestic market, HMS (80:20)
is being transacted with Rs 25,000/MT Ex mills Mumbai (including all taxes),
much lesser than overseas scrap i.e. at around 26,500/MT (Ex yard) UK origin.
In the western part of the country, HMS scrap offers are hovering at Rs
25,000-26,500/MT Ex mills (including all taxes) i.e. lower by over Rs 1,000/MT
than imported scrap.

“We have nothing to do in the
market at the moment as there is a big price disparity between us (buyers and
sellers). Buyers are totally giving priority to domestic scrap and stay out of
the imported scrap market. Strong Dollar is also hurting us to take positions”,
said a major overseas scrap supplier in Mumbai.


No upside soon in iron ore, says BHP Billiton

BHP Billiton chairman Jac Nasser says he does not expect any
significant increase in iron ore prices soon, following a year of heavy falls
in Australia's biggest export earner.

He also told shareholders at the company's annual general
meeting in Sydney that China's growth rate would not continue at the same pace,
but that was expected.

A more sustainable rate would follow in line with how other
major economies have developed.

Chief executive Marius Kloppers told the AGM that BHP was
investing through the cycle to prepare for a future when China was interested
in consumer goods more than iron ore and steel for its new cities and


Iron Ore Pellet offers unexpected to rise until mid of December 

Iron Ore Pellet market in India is expected to show resistance in December as manufacturers have less hopes of any upward trend in prices for a couple of weeks. They might either stabilize or come down slightly as sponge iron prices are not picking up.

Iron Ore Pellet plants are running at low capacities as of now and offers have already been pulled down by almost all the manufacturers in the country.

Sponge iron users are holding a wait and watch attitude and observing the movement in sponge iron markets.

Buying volumes of Iron Ore Pellets have reduced slowly as buyers are unwilling to pay anything high. In last few days, the material has been imported at lower prices by plants located near the coastal areas.



Billet prices in India look to increase slightly for December       

Billet manufacturers in India are running mills at lower capacities, which is at around 50% only and few of them have taken taken a shut down to avoid any further rise in the inventory levels.

For the month of December, market participants are hopeful that Billet makers might go for a slight increase in offers and a big reduction in prices is not on the cards.

As some improvement is seen in demand of structures and pipes, Billet market should possibly be good in the last month of this year.




Pig Iron trades in China were limited in October 12

Offers in the domestic market were at low levels during the same month on account of no increase in the raw material offers and also as Pig Iron market was not doing good world wide.

A total of 10,537.363 tons of Pig Iron was imported by China in October 2012, drop of 43.542% M-o-M. Whereas, exports reduced by 50.341% to 5,944.702 tons.

On an average, Pig Iron imports offers were quoted at US$468.89/MT and those for exports were at US$460.89/MT.

In the first ten months of 2012, total imports and exports of Pig Iron stood at 372,729.52 tons and 263,672,387 tons respectively.

US$ 1=RMB 6.2892   




Billet export offers in Turkey witness no fluctuation

Billet makers in Turkey have considered no fluctuation in prices for exports purposes this week. Offers for the December rolled semi finished product are quoted in the range of $440-450/MT FOB.

Suppliers in Turkey had been offering Billet in the same range for around a couple of weeks. It was difficult for Billet producers to hold offers looking at the downward trend in prices of scrap.    



Iron Ore Pellet offers stand at low levels in South India 

“Only 40-50% of sponge iron plants in Karnataka are continuing operations and Fe 62.5 and 63 Pellet prices stand at Rs 8,000/MT on weak demand”, shared Mr. Satyabrata Ray, Manager for Marketing at MSPL in Bellary, Karnataka.

Janki Corp Limited and Xindia Steels Ltd are offering Pellet at Rs 7,000/MT and Rs 7,800/MT respectively. Pellet offers in South India are at the lowest levels presently.

Fe 55 or 56  iron ore fines is being available through e-auctions in Karnataka and is not suitable for Pellet making. Only those with a benefication plant can go for the above purchases.

Plants located near the coastal areas in Gujarat, Maharashtra or South are importing Fe 64 and 65 Pellets in large quantities at landed cost of Rs 8,200/MT from BHP Billiton, Ukraine, Brazil and Australia.


CIL has no plans to hike Coal price; will sell 50 mt through e-auctions in FY13

Coal India Ltd. (CIL) is looking to sell around 50
metric tonnes of coal via the e-auction route in the current financial year.
The initiative is to not only improve topline but to also provide access to
customers who are not able to source coal through other mechanisms. However,
the company is not contemplating price hike as of now.

Last year, the state-run miner earned Rs 5,600 crore more
that the notified price by selling through e-auction.

S Narsing Rao, chairman of the firm said, ” E-auction prices
are under pressure due to softening of international prices.” 

On an average, e-auction prices dropped by more than Rs 100
per tonne to Rs 2,282 during the preceding quarter and this happened due to
customers like cement firms opting for international coal.

Meanwhile, of the total 100 fuel supply agreements (FSAs)
which the company is supposed to sign with power companies, it has signed 33 of
which most were with NTPC.


India loses its market share in Iron ore exports market

India's efforts to clamp down on illegal mining have handed
a $15 billion lifeline to global iron ore giants, and there could be more to

Steps taken by central and state authorities to clean up the
mining and export of iron ore have shut down output in two key producing
states, slashing shipments and forcing steel mills to import a raw material the
country has in abundance.

Now the Shah Commission, whose report on top exporter Goa
led to the state government's ban on mining in September, has turned its
attention to the last major iron ore producing state of Odisha.

The exit of the world's third-largest iron ore exporter has
been perfectly timed for miners in other countries seeking alternatives for
their growing supplies as appetite from top buyer China slows.

The world's biggest producers Vale, Rio Tinto and BHP
Billiton have taken some of India's market share in China, Japan and South
Korea, and now are even eyeing exports to their erstwhile competitor.

“It will be a huge bonus for big miners. There'll also
be a premium emerging for lower grade ore and India's absence will drive
Chinese interest into Fortescue-type products “, said Graeme Train,
commodity analyst at Macquarie in Shanghai”.

Annual exports, which in the past decade peaked at nearly
106 million tonnes, may dwindle to as low as 5 million tonnes over the next
year, analysts say.

India’s exit from the global exports market is one reason
for a rebound in iron ore prices, which this year fell below $87 a tonne to
their lowest since 2009 due to China's slowing economic growth.

Also, the flipside is that India is also starting to ship in
iron ore in significant quantities.

India has imported 9 million tonnes of iron ore so far in
the fiscal year that began in April, estimates Basant Poddar, vice president of
the Federation of Indian Mineral Industries, and could ship in 15 million
tonnes for the full year.

“It is a sad situation that we cannot mine in our own
country legally and supply to our own domestic steel industry,” he added .

Importers include big producers Essar Steel ESRG.UL, Bhushan
Steel (BSSL.NS) and JSW Steel (JSTL.NS), he said.

For the next fiscal year, India's iron ore exports may be no
more than 15 million tonnes, while imports could climb to 20-25 million tonnes,
said Poddar, making the country a net importer for the first time ever and
hurting the competitiveness of its steel producers.

“Being an iron ore-rich country like India, it doesn't
make sense to be producing steel on the basis of imported iron ore. It doesn't
work out economically for the steelmakers,” said Gunjan Aggarwal, senior
consultant at research firm CRU in Mumbai.